#Liquidity101

Liquidity Ratios help measure this capability by analyzing the ratio of liquid assets (cash and accounts receivable) to current liabilities (debt due within a year), as reported on the balance sheet. Different types of Liquidity Ratios provide insight into various aspects of a company’s position, from quick ratio to cash ratio and more.Liquidity management is a critical part of financial planning and decision-making for businesses. It focuses on the company’s ability to meet its current obligations, which are usually short-term in nature.